BOSTON (Reuters) - A self-proclaimed psychic who was paid $3.5 million by an elderly Massachusetts woman in exchange for claiming to cleanse her of demons pleaded guilty on Thursday to trying to avoid paying taxes.

Sally Ann Johnson, 41, for more than seven years provided what she described as healing services to a resident of the island of Martha's Vineyard, who was more than 70 years old when she first met the spiritual healer, according to court papers.

Johnson, who ran businesses including Psychic Match Inc and Flatiron Psychic, admitted in Boston federal court that she tried to impede the administration of tax laws.

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Johnson, who told the court she never passed the second grade, called herself a Romani "spiritual consultant." She said in court she had not paid taxes in connection with the money she received as income as well as a gift.

"I honestly did not do the right thing," she said.

Johnson, who has resided in New York, Florida, Illinois and at times Massachusetts, faces up to three years in prison.

She is scheduled to be sentenced on Jan. 17. Her lawyers declined to comment.

According to court papers, Johnson at various times lived with the unnamed woman on Martha's Vineyard, a favorite vacation spot for the rich and famous.

In an effort to evade the IRS's scrutiny, Johnson, using the alias Angela Johnson, directed the woman to make payments in the name of Sally Johnson and another of her businesses, Stones of the World, charging papers said.

Johnson directed the woman to wire payments to three different bank accounts including one in the name of an associate who used at least two aliases, court papers said.

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Johnson made significant cash withdrawals from those accounts and also accrued charges on a credit card held in the woman's name, according to charging documents.